Santander will soon be able to offer loans that can be backed with tokens collateralized by agricultural products. Agrotoken is a startup that has launched agricultural commodity tokens. These tokens can be used to transact in the agriculture-related market. To validate the production system, a pilot trial was conducted.
Santander conducts a Pilot Study on Grain-Backed Lending in Argentina
Santander, a Spanish multinational bank has revealed that it will be developing a system for loans that are backed with commodity tokens. Agrotoken is an Argentinian startup which developed a set of grain-backed tokens that allow producers to transact their commodities.
Santander Argentina released a press release stating that the product has been tested and validated by Argentinian producers. Santander claims this product is unique in linking agricultural tokens with financial products, and even blockchain services for transactions.
Fernando Bautista from Santander Argentina is the head of agrobusiness.
It is the first instance of a platform that uses crypto assets and blockchain technology to increase the market for agricultural credit and unlock the potential business opportunities for the producers.
Agrotoken created three types of tokens, SOYA, CORA and WHEA. These tokens are backed by one ton (corn, wheat, or soy) of grain that was delivered from the producer to a collector. The token is then issued by a decentralized system that uses “Proof of Grain Reserve” to validate the existence of the grain for each transaction.
Applied Tokenization
Santander is convinced that this token system will allow for the creation of an entirely new business where producers can obtain financing easily using their agricultural products as collateral. Santander’s Fintech business is a hot field in Argentina. The bank has announced that it will spend $225 million to improve its hardware and software infrastructure in order to provide new products for its customers. According to Ana Botin (president of Santander), this is true.
Since 2021, Agrotoken assets were used in multiple operations. This allowed producers to purchase machinery in an easier way. Santander’s interest in crypto is not new, as the bank is already prepared to offer a cryptocurrency ETF product in Spain.
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